Iceland slashes rates as economy faces meltdown

The Central Bank of Iceland has cut its key rate by 350 basis points on the back of the meltdown in the country's banking sector.

The decision, a surprise move, leaves the central bank's benchmark rate at 12%.

The central bank said that the "unprecedented turbulence" of recent weeks, which has seen Reykjavik take over the country's three biggest banks, had already resulted in a variety of jobs disappearing "virtually in the blink of an eye."

"Demand has declined precipitously, and by all

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